XL
              On March 16,1995, the Clinton Administration announced a portfolio of reinvention initiatives
              to be implemented by the U. S. Environmental Protection Agency (EPA) as a part of its efforts
              to achieve greater public health and environmental protection at a more reasonable cost.
              Through Proj ect XL, which stands for excellence and Leadership, EPA enters into specific
              proj ect agreements with public or private sector sponsors to test regulatory, policy, or proce-
              dural alternatives that will produce data and experiences to help the Agency make improve-
              ments in the current system of environmental protection. The goal of Proj ect XL is to implement
              50 proj ects that will test ways of producing superior environmental performance with improved
              economic efficiencies, while increasing public participation through active stakeholder pro-
              cesses. As of October 1998,10 XL projects are in the implementation phase and 20 XL
              proj ects are under development. Proj ect XL Progress Reports provide proj ect-specific
              overviews of the status of XL proj ects that are implementing Final Proj ect Agreements (FPAs).
              The progress reports are available on the Internet via EPAs Proj ect XL web site at http://
              www.epa.gov.Proj ectXL. Hard copies may be obtained by contacting the Office of
              Reinvention's Project XL Docket at 202-260-7434. General information on Project XL is
              available on the web site or by contacting the general information number at 202-260-5754.



              Intel Corporation, the world's largest semiconductor manufacturer, has operated the Fab 12
              facility in Chandler, Arizona since 1996. Fab 12 is Intel's newest chip fabrication facility
              operating on the 720-acre Ocotillo site.  The largest facility on the site, FAB 12, is the
              company's newest chip fabrication facility. Intel's Project XL agreement applies to the entire
              Ocotillo site, including any new semiconductor-related facilities that may be built at the site.
              Intel is striving to reduce the environmental impact of its fabrication process by implementing an
              environmental management master plan
              that includes both voluntary and            •••''•-._
              mandatory commitments for environ-      ,' —  ',  i            T  "   ~  «            *  1"
              mental performance, and is tailored to     •-      >    -        ~ \  ,'   '"'•'     .',",,
              meet both the operational needs of the          " ;  •        -   ,   \  -_'  j   •'    if"
              facility and the concerns of the local      -r           '  "" L    '-,  >   ,  t  /"//;
              community.                             ;    '  ''"---r    „„'_     '    '.'    -'.   -  f
              In the highly competitive microproces-      " = -   -jr
              sor industry, success is directly         Intel XL Project" V          -
                                                   Chandler, Arizona \ ,—s     t.    £   "  •  \
                                                                   '   \f

mf                   f                  f                   ,                  ,    *
    June 30, 1995      November 19,1996         April, 1998            October 1998         December 31,2001
   Intel XL Proposal    Final Project Agreement    First Annual Stakeholder    Semi-annual Stakeholder   Termination/Renewal of
      Submitted            Signed               Meeting               Meeting                FPA

-------
Intel XL Project                                                                            (3-31-991
  related to a manufacturer's ability to bring new technologies to the marketplace ahead of domestic and foreign
  competitors. The dynamic nature of this industry makes it crucial for a company to obtain maximum flexibility
  in its operations. Each new generation of microprocessors requires continual process experimentation, involv-
  ing frequent changes in equipment and process chemicals. A typical Intel plant can undertake 3 5 to 40 pro-
  cess chemical changes annually, and begin manufacturing a complete new generation of chips every 18 to 30
  months. Given these operating characteristics, standard Federal air quality permit requirements increase the
  potential for delays in the development and production of new products and product lines. The Intel XL
  proj ect has the potential to minimize these delays and provide more flexibility in Intel's operations, by allowing
  the facility to make operational changes without a permit review for each change, as long as the overall permit
  limits are met.

  In the FPA, Intel has committed to limit emissions of criteria and hazardous air pollutants (HAPs), and to meet
  other environmental goals that are designed to improve the area's air and water quality, conserve water,
  reduce the generation of hazardous and nonhazardous waste, and improve the general environmental perfor-
  mance of the facility. The anticipated environmental benefits from this proj ect are the following:
  * Maintaining a site-wide cap on air emissions for nitrogen oxide (NOx), sulfur dioxide (SOx), carbon mon-
    oxide (CO), particulate matter (PM10), and volatile organic compounds (VOCs) at levels that ensure that
    the current site, including any future semiconductor manufacturing plants built there, is and remains a minor
    air emissions source, as defined by the Clean Air Act (CAA).
  • Using state guidelines to establish enforceable caps on emissions that may affect the community adjacent to
    the site. These standards also will be used to voluntarily set lower emissions levels to increase protection
    for those working at or visiting the facility.
  * Conserving city water resources by increasing the amount of recycled manufacturing effluent to 65% of the
    volume of fresh water used, by 2001.
  * Reducing the amount of fresh water used by using 100% treated effluent for the semiconductor manufactur-
    ing cooling tower and landscaping.
  • Recycling up to 60% of the solid waste and up to 70% of the nonhazardous chemical wastes the facility
    generates, by the year 2001.
  • Recycling an average of about half of the hazardous waste the facility generates over the five-year period
    between 1997 and 2001.
  * Maintaining a minimum setback of 1,000 feet from the closest manufacturing-related building to residential
    property.
  • Reducing vehicle miles traveled by employees through a trip reduction program.
  * Participating in equipment donation and environmental education programs.



  The Intel XL Project establishes a long-term plan to minimize the Ocotillo facility's environmental impact on
  local air, land, and water quality, to minimize both its use of fresh water and its generation of waste, and to
  undertake a number of other actions to enhance the overall environmental quality of the community. As an
  incentive to achieve environmental performance at the Ocotillo facility, EPA, the Arizona Department of
  Environmental Quality (ADEQ), the Maricopa County Bureau of Air Pollution Control, and the City of
  Chandler will provide a more flexible and cost-effective process for regulatory management. The FPA pro-
  vides regulatory flexibility in the areas of air quality permitting, environmental performance reporting, and
  innovative technology.

  The statutory programs, and the EPA offices administering the programs, that affect the Intel XL proj ect are:

-------
 Intel XL Project                                                                            (3-31-991
*  Clean Air Act (CAA) programs administered by EPA's Office of Air Quality Planning and Standards;
*  Clean Water Act (CWA) programs administered by EPA's Office of Wastewater Management and EPA's
   Office of Wetlands, Oceans, and Watersheds;
*  Resource Conservation and Recovery Act (RCRA) programs administered by EPA's Office of Solid Waste;
   and
*  Pollution Prevention Act programs administered by EPA's Office of Prevention, Pesticides, and Toxic
   Substances.
The parties to the FPA have designated the ADEQ as the coordinating agency for the FPA. This role includes
maintaining public records, coordinating implementation issues such as the conduct of inspections, and consid-
ering compliance issues or enforcement actions. The signatories anticipated that consolidating the coordination
in one agency would enhance the effective administration of the FPA, streamline regulatory oversight, and
coordinate approaches to environmental issues that arise at the Ocotillo site.  The oversight of the air quality
permit conditions is delegated to the Maricopa County Environmental Services Department (MCESD). The
oversight of the industrial user wastewater discharge permit is designated to the City of Chandler.

Air Quality Permitting. The FPA and revised air quality permit provide Intel with the flexibility to make
equipment and process changes and construct new facilities at the site without air quality permit reviews, as
long as the Plant Site Emission Limits (PSELs) are not exceeded and all other FPA and permit limits are met.
To provide an additional safety factor, Arizona Ambient Air Quality Guideline limits for FIAPs will not be
exceeded at the Intel facility property line or elsewhere on the site. This flexibility in air quality regulation allows
Intel to eliminate potentially 30-50 permit reviews a year and bring new products to market faster.

Environmental Performance Reporting. Compliance with PSELs will be verified through periodic emissions
reporting. EPA and Arizona are allowing Intel the flexibility to consolidate routine reports into four quarterly
reports and one annual report. Such periodic reporting will allow the public to verify that Intel has fully com-
plied with the PSELs in the air quality permit. These reports are available on the Internet via EPA's Proj ect XL
web site athttp://www.epa.gov.ProjectXL.

Effluent Discharge Permitting. The effluent discharge limitations, which are contained in a separate permit,
are incorporated into the FPA by reference. The reporting of these discharges is incorporated into the quarterly
and annual reports submitted under the FPA.  This reporting system provides Intel with a more flexible reporting
format, and makes a consolidated environmental report available to the signatory agencies and the public.

                                ail

Proj ect XL provides EPA opportunities to explore and implement flexible approaches that protect the environ-
ment and advance collaboration with stakeholders. Specifically, the Intel XL project promotes innovation and
system change in the following areas:

Consolidated Reporting. The XL project allows Intel to consolidate the reporting for Federal, state, and local
permitting and regulatory programs into four quarterly and one annual reports and to make these reports
available on the Internet. The required data and reporting format were designed in conjunction with the EPA;
state, county, and local regulatory authorities; and a Community Advisory Panel (CAP) consisting of area
residents. EPA anticipates that this innovation will be incorporated into future XL proj ects, as EPA will work
with sponsors, other regulatory authorities, and stakeholders to develop similar reporting formats and to make
them available on the Internet. This project will serve as a test for sector-wide collection of higher quality
information from regulated industries, and directly influence the development of the comprehensive information
management plan to be developed by EPA's consolidated Environmental Information Office.

-------
Intel XL Project
                                       (3-31-991
 Internet Reporting. In addition to filing the quarterly and annual reports with regulatory authorities Intel has
 made them available on a web site dedicated to this XL proj ect. The site also includes historical information
 pertaining to the FPA, such as minutes of previous public meetings, and public comments and responses. The
 experience gained through this reporting approach will contribute to the development of a generic process for
 disseminating high-quality information to regulatory authorities and the regulated community.

 Air Permits. The Intel XL project is testing two of several alternatives for improving air permitting. These
 include pre-approval and elimination of review of specific manufacturing process changes, if emissions remain
 under a capped amount; and pre-approval of a major plant expansion, if emissions remain below a capped
 amount for the entire site. These emission caps are set at levels low enough for the entire site to remain a minor
 source of criteria and hazardous air pollutants under the Clean Air Act. This test will directly influence EPAs
 sector-based action plan and the Pollution Prevention in Permitting Program.



 The tables in this section and the Environmental Performance section summarize progress in meeting commit-
 ments described in the FPA for Intel's facility in Ocotillo, Arizona.
   Commitment
  Status (9/30/98)
                                 Plant Site Emission Limits (PSELs)
  Limits the emissions of the following: volatile organic
  compounds (VOCs), inorganic hazardous air pollut-
  ants (HAPs), organic HAPs, nitrogen oxides (NOx),
  carbon monoxide (CO), particulate matter (PM10),
  phosphine, sulfuric acid, and new chemicals that are
  brought on-site that produce air emissions.
All PSELs have been achieved through the third
quarter of 1998.
                              Air Quality Evaluation and Management
  Screen modeling analysis whenever Intel uses a new
  chemical for which Arizona Ambient Air Quality
  Guidelines has been established.
Screen modeled four new chemicals associated with
the 0.25 micron process in the fourth quarter 1997.
  Consult with the Maricopa County Environmental
  Services Department and the Arizona Department of
  Health Services in conjunction with new chemicals
  that are introduced and have not been evaluated.
No new chemicals that have not been evaluated have
been introduced.
  Develop production and performance standard.
A standardized unit of production activity, called a
production unit factor (PUF), against which to
measure emissions was developed in 1996. The ratio
of tons of emissions to PUFs for all of 1997 were
provided in the 1997 Annual Report, and future
annual reports will include similar performance
measures that may be compared to this baseline.

-------
Intel XL Project
(3-31-991
Commitment Status (9/30/98)
Reporting of Air Emissions
Quarterly report of actual air emissions of all
pollutants subj ect to PSELs or limits otherwise
identified.
Annual summary of actual aggregate emissions of all
pollutants subj ect to PSELs or limits otherwise
identified.
Annual summary of known actual emissions of
individual HAPs emitted above 1,000 pounds per
year.
Annual list of known individual HAPs emitted in
quantities less than or equal to 1 ,000 Ibs per year.
Annual report of VOCs & HAPs per unit of
production (PUF).
Quarterly reports through the third quarter of 1 998
filed on schedule.
Annual summary for 1997 filed on schedule. Quar-
terly reports include summaries for previous 12
months.
The 1 997 annual report indicates there were no
individual HAP emission above 1,000 pounds.
The 1997 annual report includes aggregate amounts
of emissions of known HAPs, and lists 3 organic and
4 inorganic HAPs that fall into this category.
The 1997 Annual Report included the following ratios
of tons of emissions to PUFs: 1.28E~06for Vocs, and
9.40E-08 for HAPs. The PUF = square inches of
silicon processed/feature size. Feature size is the
width of the smallest transistor, which was 0.35
microns in 1997.
General Reporting
Prepare consolidated reports quarterly for signatory
agencies, and make the reports available to the
public.
Prepare annual summary report.
Completed all seven quarterly reports through the
third quarter of 1998.
Completed 1997 annual report.
Water and Wastewater Use
Manufacturing effluent will be treated for reuse or
reinjection into the groundwater supply, according to
the following timetable: 45% of freshwater volume
intake in 1997, 55% in 1999, and 65% in 2001.
Use treated effluent water for 1 00% of the water
used for cooling tower makeup and landscaping, by
the end of 1997.
Achieved 66% for 1 997 and 62% for the first three
quarters of 1998.
Achieved 80% for 1 997 and 98% for the first three
quarters of 1998.
Management of Stormwater
Use secondary containment areas, best management
practices, and retention basins.
Achieved prior to signing of FPA.
Management of Waste
Recycle substantial portions of solid, hazardous, and
nonhazardous chemical waste, according to a
schedule in the FPA.
Achieved through the third quarter of 1 998 .

-------
Intel XL Project
(3-31-991
Commitment Status (9/30/98)
Intel Corporate Design for the Environment Program (DFE)
Implement the corporate DFE program, which seeks
to develop environmentally compatible processes and
products.
Being implemented as part of Intel's corporate- wide
effort to design improvements for environmental
management and performance into manufacturing
processes during the development stage.
Accidental Spill Contingency Planning
Implement a single emergency plan for the facility that
integrates all applicable environmental requirements as
they relate to emergency planning.
Emergency plan was implemented in the first quarter
of 1997.
Trip Reduction Program for Intel Employees
Implement and maintain ongoing car pool and other
trip reduction activities.
Ride share registration has grown from 23 1 by 9/3 O/
97 to 951 by 9/3 0/98.
Property Setback for the Site
Maintain a minimum setback of 1 ,000 feet from the
closest manufacturing-related building to residential
properly, and use contoured landscaping to add to the
aesthetic appeal of the setback.
The 1 ,000 foot setback has been maintained for all
plant expansions.
Environmental and Education in the Community
Ongoing participation in environmental mentoring and
educational activities targeted at various groups in the
community.
Third quarter 1998 activities included: Intel volun-
teers completed a cleanup and painting project in a
local elementary school; participated in a partnership
with the City of Chandler to repair and donate
discarded bicycles; and prepared, painted and
cleaned up housing for homeless people and victims
of domestic violence.
Donation of Computers and Manufacturing Equipment
Ongoing program to donate new and used computers
to schools and libraries, and used manufacturing
equipment to universities.
Donated 455 personal computers in 1997.
Donated 1 ,370 personal computers through the third
quarter of 1998.
  This section summarizes Intel's progress in meeting the environmental performance commitments described in
  the FPA, in comparison to the FPA goals and what would have been required under conventional environmen-
  tal regulations for minor sources in National Ambient Air Quality Standards (NAAQS) nonattainment areas.
  Because the plant was new at the time the FPA was developed, there were no data upon which to establish a
  baseline. Therefore, the "baseline" used in this section is based on what a conventional minor source permit
  might have allowed. All the air quality permit and wastewater discharge permit commitments are enforceable
  under various environmental laws. There are no regulatory requirements for the other commitments.

-------
 Intel XL Project
                             (3-31-991

 TPY=tons per year
 T-YTD=tons-year to date (9/30/98)
Volatile Organic Compounds (VOCs): Intel has committed to
capping the emissions of VOCs at 40 TPY for the entire facility. The
FPA provides Intel the flexibility to make changes to the existing
manufacturing operations and to expand the plant, as long as the
entire Ocotillo site stays within this and other established limits. The
baseline shown is based on an estimate of what would have been
allowed under a conventional minor source air quality permit.

Progress: The facility has remained well under the limit for 1997,
and for the first three quarters of 1998.
          Volatile Organic Compounds
  1998YTD
 1997 Actual
  FPA Goal
                                                                  Baseline
                  12.4
                    16.3
                                  40
                                                                                                       less than
                                                                                                         50
                                                                              10
                                                                                    20     30
                                                                                    Tons per year
                                                                                                40
                                                                                                      50
Nitrogen Oxide (NOx): Intel has committed to capping the emis-
sions of NOx at 49 TPY for the entire site. The FPA provides Intel
the flexibility to make changes to existing manufacturing operations
and to expand the plant, as long as the entire site stays within this and
other established limits. The baseline shown is based on an estimate
of what would have been allowed under a conventional minor source
air quality permit.

Progress: The facility has remained well under the limit for 1997,
and for the first three quarters of 1998.
                Nitrogen Oxide
  1998YTD
 1997 Actual
  FPA Goal
                                                                  Baseline
              6.8
                                       less than
                                         50
                                                                         0     10    20    30     40     50
                                                                                     Tons per year
Carbon Monoxide (CO): Intel has committed to capping the
emissions of CO at 49 TPY for the entire site. The FPA provides
Intel the flexibility to make changes to the existing manufacturing
operations and to expand the plant, as long as the entire site stays
within this and other established limits. The baseline shown is based
on an estimate of what would have been allowed under a conven-
tional minor source air quality permit.

Progress: The facility has remained well under the limit for 1997,
and for the first three quarters of 1998.
              Carbon Monoxide
 1998YTD
1997 Actual
 FPA Goal
                                                                  Baseline
           5.7
          4.3
                                                                                                       less than
                                                                                                        100
                                                                        0     20     40     60     80
                                                                                    Tons per year
                                                                                                     100

-------
Intel XL Project
                                     (3-31-991
  Sulfur Dioxide (SO,): Intel has committed to capping
  the emissions of sulfur dioxide at 5 TPY for the entire site.
  The FPA provides Intel the flexibility to make changes to
  the existing manufacturing operations and to expand the
  plant, as long as the entire site stays within this and other
  established limits. The baseline shown is based on an
  estimate of what would have been allowed under a
  conventional minor source air quality permit.

  Progress: The facility has remained well under the limit
  for 1997, and for the first three quarters of 1998.
                  Sulfur Dioxide
   1998YTD
  1997 Actual
   FPA Goal
   Baseline
           - 0.3
           - 0.4
250
i i
i i i
3 50 100 150 200 250
Tons per year
  Particulates (PM10): Intel has committed to capping the
  emissions of parti culate matter at 5 TPY for the entire site.
  The FPA provides Intel the flexibility to make changes to
  the existing manufacturing operations and to expand the
  plant, as long as the entire site stays within this and other
  established limits. The baseline shown is based on an
  estimate of what would have been allowed under a
  conventional minor source air quality permit.

  Progress: The facility has remained well under the limit
  for 1997, and for the first three quarters of 1998.
                  Particulates
   1998YTD
  1997 Actual
   FPA Goal
   Baseline
           0.5
          - 0.6
less than
  70
                                                                 0     15    30    45
                                                                             Tons per year
                                                                                        60
                                                                                              75
  Aggregate Combined Organic Hazardous Air
  Pollutants (HAPs): Intel has committed to capping the
  emissions of organic HAPs at 10 TPY for the entire site.
  Organic HAPs include methanol, xylene, and ethylene
  glycol. The FPA provides Intel the flexibility to make
  changes to the existing manufacturing operations and to
  expand the plant, as long as the entire site stays within
  this and other established limits. The baseline of 25 TPY
  refers to a total of organic and inorganic HAPs, which is
  what would have been allowed under a conventional
  minor source air quality permit. The combined total
  commitment for organic and inorganic HAPs under the
  XL permit is now 20 TPY.

  Progress: The facility has remained well under the limit
  for 1997, and for the first three quarters of 1998.
Aggregate Combined Organic Hazardous Air Pollutants
   1998YTD
  1997 Actual
   FPA Goal
    Baseline
             0.9
             0.5
                        10
                                          "25
                      10     15
                      Tons per year
                                  20
                                        25
      * The baseline includes combined organic
       and inorganic HAPs.

-------
 Intel XL Project
                            (3-31-991
Aggregate Combined Inorganic Hazardous Air Pollutants
(HAPs): Intel has committed to capping the emissions of inorganic
HAPs at 10 TPY for the entire site. The FPA provides Intel the
flexibility to make changes to the existing manufacturing operations
and to expand the plant, as long as the entire site stays within this and
other established limits. The baseline of 25 TPY refers to a total of
organic and inorganic HAPs, which is what would have been allowed
under a conventional minor source air quality permit. The combined
total commitment for organic and inorganic HAPs under the XL
permit is now 20 TPY.
Progress: The facility has remained well under the 1997 limit, and for
the first three quarters of 1998.
      Aggregate Combined Inorganic HAPS
 1998YTD
1997 Actual
  FPA Goal
  Baseline
           1.2
           0.7
                      10
                                         "25
                    10    15
                     Tons per year
                                20
                                       25
                                                                     * The baseline includes combined organic
                                                                      and inorganic HAPs.
Phosphine: Intel has committed to capping the emissions of phos-
phine at 4 TPY for the entire site. The FPA provides Intel the
flexibility to make changes to the existing manufacturing operations
and to expand the plant, as long as the entire site stays within this and
other established limits. The baseline of 10 TPY for a specific HAP
is based on what the CAA would allow under a conventional minor
source air quality permit.
Progress: The facility has remained well under the limit for 1997,
and for the first three quarters of 1998.
                  Phosphine
 1998YTD
1997 Actual
 FPA Goal
                                                                  Baseline
         .  <0.01
         -  0.01
                                                                                                        10
                                                                                    4      6
                                                                                    Tons per year
                                                                                                       10
Sulfuric Acid: Intel has committed to capping the emissions of
sulfuric acid at 9 TPY for the entire site. The FPA provides Intel the
flexibility to make changes to the existing manufacturing operations
and to expand the plant, as long as the entire site stays within this and
other established limits. The baseline of 10 TPY is based on what the
CAA would allow under a conventional minor source air quality
permit.
Progress: The facility has remained well under the limit for 1997,
and for the first three quarters of 1998.
                Sulfuric Acid
 1998YTD
1997 Actual
 FPA Goal
         -  <0.01
         -  0.01
                                                                                                        10
                                                                                    4      6
                                                                                    Tons per year
                                                                                                       10

-------
      Intel XL Project
                                                                                          (3-31-991
         City Water Reuse: Intel has committed to increase the
         amount of water sent for recycling to the city's effluent
         treatment and recharge facility, according to the following
         timetable: 45% of freshwater volume in 1997, 55% in
         1999, and 65% in 2001. There is no regulatory require-
         ment or previous  standard that might be considered a
         baseline, although water conservation is a priority environ-
         mental goal in this arid region.
                                                          1998 YTD
                                                         1997 Actual
                                                        Performance
                                                            Goals
                                                                        City Water Reuse
                                                                                       62%
                                                                                        66%
                                                                        1997 Goal
                                                                                 45%
   1999 Goal
               55%
                                                                        2001 Goal
                                                                                       65%
                                                                                20
                                                                                      40     60
                                                                                        Percent
                                                                                                   80
                                                                                                         100
Progress: For 1997 and the first three quarters of 1998,
the facility has achieved the agreed-upon goals for 1997
and 1999. In 1997, Intel recycled 355 million gallons and, in the first three quarters of 1998,298 million
gallons.
                                                                    Use of Treated Manufacturing Wastewater
                                                                 1998 YTD
                                                               1997 Actual
                                                                1997 Goal
                                                                                                        98%
Use of Treated Wastewater: Intel has committed to using
treated effluent water for semiconductor manufacturing
cooling tower makeup and landscaping. The treated
effluent will come from the city's wastewater reclamation
facilities and treated wastewater from its manufacturing
operations. There is no regulatory requirement or previous
standard that might be considered a baseline, although
water conservation is a priority environmental goal in this
arid region.
Progress: Although the facility achieve only 80% in 1997,
the company reports that it achieved 98% for the first
three quarters of 1998. Based on a review of the system
design and after spending $300,000 annually for phos-
phate treatment, the company has informed the stakehold-
ers that it would not likely be able to achieve more than 95%, without spending significant resources on addi-
tional treatment systems. In 1997 Intel reused 132 million gallons and, in the first three quarters of 1998,119
million gallons.
                                                                                                         100%
                                                                              20
                                                                                    40     60
                                                                                      Percent
                                                                                                80
                                                                                                      100
        Solid Waste Recycling: Intel has committed to recycle
        substantial portions of solid and hazardous waste according
        to the following schedule: 40% in 1997, 55% in 1999, and
        60% in 2001. There is no regulatory requirement or previ-
        ous standard that might be considered a baseline.
        Progress: For all of 1997, the facility achieved the agreed-
        upon rate for solid waste recycling; and, for the first three
        quarters of 1998, exceeded the commitment for 2001.
                                                                      Solid Waste Recycling
                                                          1998 YTD
                                                         1997 Actual
                                                        Performance
                                                            Goals
                                                                                         67%
                                                                                 42%
                                                                     1997 Goal
                                                                               40%
1999 Goal
                                                                             2001 Goal
               55%
                 60%
                                                                                20
                                                                                      40     60
                                                                                         Percent
                                                                                                          100
10

-------
 Intel XL Project
                                                                                           (3-31-991
Hazardous Waste Recycling: Intel has committed to recycle
substantial portions of hazardous waste generated at the plant
complex according to the following schedule: 60% in 1997,
5 0% in 1999, and 40% in 2001. Intel anticipates that the percent
of hazardous waste to be recycled will decrease because it
expects to reduce the amount of hazardous waste generated at
this site through pollution prevention measures. There is no
regulatory requirement or previous standard that might be
considered a baseline.
                                                                      Hazardous Waste Recycling
                                                              1998 YTD
                                                             1997 Actual
                                                            Performance
                                                                Goals
                                                                                      48%
                                                                                            67%
                                                                          1997 Goal
                                                                                          60%
    1999 Goal
                50%
                                                                           2001 Goal
                                                                                   40%
                                                                           20
                                                                                  40     60
                                                                                    Percent
                                                                                              80
Progress: The facility has achieved the agreed-upon rate for all
of 1997. However, the percentage recycled for the first three
quarters of 1998 was below both the 1997 and 1999 targets. The startup and sustaining activities of a new
manufacturing process module produced a nonrecyclable waste stream, and the percentage amount recycled
during the first quarter fell to 36%. Intel began executing several proj ects to reduce the quantities of these
wastes, achieved an improvement to 63% during the third quarter of 1998, and expects to meet or exceed the
1999 goal by the fourth quarter of 1998. Actual tons recycled were 18 8 in 1997 and 270 in the first three
quarters of 1998.
                                                                                                    100
Nonhazardous Chemical Waste: Intel has committed to
recycle substantial portions of nonhazardous chemical waste
according to the following schedule: 25% in 1997, 50% in 1999,
and 70% in 2001. There is no regulatory requirement or previous
standard that might be considered a baseline.

Progress: The facility has achieve the 1997 goal for all of 1997,
and for the first three quarters of 1998. Intel recycled 275 tons
of nonhazardous chemical waste in 1997, and 239 tons during
the first three quarters of 1998.
                                                                       Nonhazardous Chemical Waste
                                                              1998 YTD
                                                             1997 Actual
                                                            Performance
                                                                Goals
                                                                                   40%
                                                                                         58%
                                                                       1997 Goal
                                                                              25%
1999 Goal
                50%
                                                                       2000 Goal
                                                                                             70%
                                                                           20
                                                                                  40     60
                                                                                    Percent
                                                                                              80
                                                                                                    100
Intel has worked to ensure that stakeholders are involved in the environmental design and impact assessment
of its XL proj ect. Stakeholder involvement efforts during negotiation of the FPA included:
* Use of a Community Advisory Panel (CAP) consisting of area residents to serve as a full partner in the
  project's development;
• An outreach effort to local citizens (including 25,000 hand-delivered notices);
• The involvement of national, regional, and local nongovernmental organizations that provided substantial
  comments on the project; and
* The use of EPA and Intel web sites to increase the transparency of proj ect development and implementation.
                                                                                                        11

-------
     Intel XL Project                                                                          (3-31-991
        Intel has helped establish a Stakeholder Team to ensure the involvement of national, regional, and local regula-
        tory authorities and public members of the CAP as full partners in the proj ect's implementation. This team
        meets once a quarter to review the proj ect's progress reports. A first annual stakeholder meeting was held with
        the Stakeholder Team and the general public in April 1998, and a semi-annual stakeholder meeting was held in
        October 1998. All quarterly and annual reports are published on Intel's web site to make its environmental
        data publicly available as part of a standard reporting mechanism.



        *  Complete quarterly progress reports for the fourth quarter of 1998 and first quarter of 1999, within 60 days
          after the close of the quarters.
        •  Convene the CAP and other parties in January 1999 to perform an in-depth evaluation of the company's
          efforts toward attainment of the commitments identified in the FPA.
        *  Plan and implement a semi-annual stakeholders meeting in April 1999.
        •  Continue to execute a series of proj ects to reduce quantities of hazardous waste to meet or exceed the
          program's goal by the end of the fourth quarter of 1998.
        •  Enhance the site's VOC emission performance through a comprehensive approach that focuses on the
          following three initiatives: reduce VOCs used to clean equipment, optimize the VOC exhaust system, and
          upgrade the carbon concentrating condenser unit.


        •  Jim Larsen, Intel Corporation, 602-715-0206
        •  Colleen McKaughan, EPA Region 9, 520-498-0118
        •  Katherine Dawes, EPA Headquarters, 202-260-8394
        •  Gregg Workman, ADEQ, 602-207-4337
        *  Jo Crumbaker, Maricopa County Bureau of Air Pollution Control, 602-506-6705
        •  Pat Sampson, City of Chandler, 602-786-2396
        *  Pat Marietta, Gila River Indian Community Department of Environmental Quality, 520-562-2234
        •  Steve Brittle, CAP, 602-268-6110
        •  Barbara Knox, CAP, 602-963-3802
        •  Jim Lemmon, CAP, 602-941-5517
        •  Dave Matusow, CAP, 602-899-9425



        The information sources used to develop this progress report include: 1) discussions during a teleconference
        among representatives of the U. S. Environmental Protection Agency, Intel Corporation, Arizona Department of
        Environmental Quality, Maricopa County, City of Chandler, and local residents serving on the Intel Community
        Advisory Panel; 2) the Final Proj ect Agreement for the Intel XL proj ect; and 3) annual and quarterly status
        reports prepared by Intel Corporation. The information  sources are current through December, 1998.
12

-------
 Intel XL Project                                                                            (3-31-991
Carbon monoxide (CO): CO is defined in Section 302, Subsection W of the United States CAA, as carbon
monoxide. This is a combustion emission produced when fossil fuel is burned (oxidized) incompletely.
Clean Air Act (CAA): This act is the comprehensive Federal law that regulates air emissions from area,
stationary, and mobile sources. It authorizes EPA to establish nationwide air quality standards, which are
required to be achieved in all parts of the country. The National Ambient Air Quality Standards (NAAQS)
establish the maximum concentration for specific pollutants that may be present in the ambient air. States are
required to draw up plans to achieve the Federal standards within their borders.
Clean Water Act (CWA): This act establishes a number of initiatives designed to "restore and maintain the chemi-
cal, physical, and biological integrity of the nation's waters." (33 United States Code, Section 25 l(a)). The CWA
makes it unlawful for any person to discharge any pollutant into navigable waters unless done in compliance with
the Act. Under the Act, EPA and the states have established effluent standards on an industry basis, and a
permitting program to regulate the discharge of pollutants to the nations waters, among other things.
Community Advisory Panel (CAP): An advisory group consisting of area residents.
Hazardous air pollutants (HAPs): Air pollutants that are not covered by National Ambient Air Quality Standards
but that may present a threat of adverse human health effects or adverse environmental effects. Such pollutants
include methanol, xylene, ethylene glycol, hydrofluoric acid, chlorine, hydrochloric acid, and phosphine.
Hazardous waste recycle: Materials that are specifically designated as hazardous waste under EPA's Resource
Conservation and Recovery Act (RCRA) regulations. The percentage recycled is calculated by dividing the
quantity of hazardous waste sent off for beneficial recycle and energy recovery by the total quantity of hazard-
ous waste generated and shipped offsite.
National Ambient Air Quality Standards (NAAQS): Maximum concentration of a pollutant that may be
present in the ambient air in all parts of the country, under the CAA. EPA is responsible for establishing these
standards, and states are required to draw up plans to achieve the Federal standards within their borders.
Nitrogen oxide (NOx): An air pollutant that is the result of photochemical reactions of nitric oxide in ambient
air. Typically, it is a product of combustion from transportation and stationary sources. It is a maj or contributor
to the formation of ozone in the troposphere, photochemical smog, and acid deposition.
Nonattainment area: An area of the country in which the primary NAAQS are not met. Special provisions of
the CAA apply to these areas. Primary standards are designed to protect the public health with an adequate
margin of safety.
Nonhazardous chemical waste recycle: Used chemical materials which are collected for the purpose of return-
ing them into beneficial reuse. They are classified as nonhazardous based upon EPA's definition set forth under
RCRA. The percentage recycled is calculated by dividing the amount of material in this category by the total
quantity of waste generated.
Particulate matter (PM10): Airborne particulate matter with an aerodynamic diameter less than or equal to 10
microns as defined in  regulations promulgated pursuant to the CAA (40 Code of Federal Regulations
51.100(qq)).
                                                                                                        13

-------
Intel XL Project                                                                            (3-31-991
  Plant site emissions limits (PSELs): The air quality permit establishes PSELs in tons per year for emissions of
  the following: VOCs, NOx, CO, PM10, SO2, combined organic HAPs, combined inorganic HAPs, sulfuric
  acid, and phosphine.

  Pollution Prevention Act (PPA): This 1990 law was passed to reduce or eliminate industrial pollutants through
  technology transfer, education, and public awareness. The programs developed under the PPA are adminis-
  tered by EPA's Office of Prevention, Pesticides, and Toxic Substances.

  Production unit factor (PUF): A standardized unit of production activity against which to measure emissions.
  The ratio of tons of emissions of HAPs and VOCs to the PUF is used as an indicator of whether emissions are
  increasing or decreasing in relation to production activity. The PUF was developed for the Ocotillo plant in
  December 1996 to incorporate both semiconductor complexity and volume of raw material (silicon) pro-
  cessed. The PUF is calculated as feature size/square inches of silicon processed. Feature size is the width of
  the smallest transistor, and is an indicator of process and product complexity. For all of 1997, the feature size
  was 0.35 microns. For all of 1997, the first year under the FPA, the ratio of tons to PUFs was 1.28E~06 for
  VOCs, and 9.40E"08 for FIAPs. Future annual reports will include similar ratios that may be compared to this
  baseline.

  Resource Conservation and Recovery Act (RCRA): RCRA gives EPA the authority to control hazardous
  waste from the "cradle-to-grave." This includes the generation, transportation, treatment, storage, and disposal
  of hazardous waste. RCRA also set forth a framework for the management of nonhazardous waste. RCRA
  enables EPA to address environmental problems that could result from underground storage tanks storing
  petroleum and other hazardous substances. RCRA focuses only on active and future facilities and does not
  address abandoned sites.

  Solid waste recycle: Includes materials designated under RCRA as nonhazardous waste such as paper, plas-
  tics, aluminum, glass, and wood. The percentage recycled is calculated by dividing the quantity of materials
  within this category that are sent to beneficial recycle by the total volume of solid waste shipped offsite.

  Sulfur dioxide (SO2): SO2 gases are formed when fuel containing sulfur (mainly coal and oil) is burned during
  metal smelting and other industrial processes.  SO2 is associated with acidification of lakes and streams, accel-
  erated corrosion of buildings and monuments, reduced visibility, and adverse health effects, including effects on
  breathing, respiratory illness, and aggravation of existing cardiovascular disease.

  Volatile organic compound (VOC): Any organic compound that easily evaporates and participates in atmo-
  spheric photochemical reactions except those designated by EPA as having negligible photochemical reactivity.

  Wastewater: The spent or used water from a home, community, fam, or industry that contains dissolved or
  suspended matter.

-------